This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 7/27/2017

India has the fifth largest power generation installed capacity in the world.  Coal dominates the energy mix at 60%, but renewable sources are quickly expanding their share.  Renewable sources increased 6.47% for 2015-2016, and 24.58% for 2016-2017, compared to India’s overall annual growth of total sources of 5.69% (2015-2016) and 5.81% (2016-2017).

India's Total Installed Capacity by Power Source (GW)


As of March 2016

As of March 2017

Percentage of Energy Mix





























Since 2014, Prime Minister Narendra Modi has reiterated his campaign pledge to ensure 24/7 power for all Indians, resulting in a broad mandate to improve India’s power sector. Modi’s plan for India is to build energy security by diversifying supply reliance beyond traditional carbon sources (particularly coal), and by significantly expanding levels of wind, solar and biomass.  According to the Department of Industrial Policy and Promotion, the “Power For All” initiative has opened investment potential of nearly $224 billion in the next four to five years for modernization of power generation, distribution, transmission, and equipment.

India's Installed Capacity for Renewable Energy (MW)


As of March 2015

As of March 2016

As of March 2017

Estimated for 2018

Target for 2022 (GW)

Wind Power






Solar Power






Biomass Power






Small Hydro


















The Modi Administration also set ambitious targets to continually increase the percentage of renewables within the overall mix of energy sources (currently 15% in 2016) to 40% by 2030. To further define and benchmark the goal, the government announced plans to add 175 GW of renewable energy capacity by 2022, to include 100 GW of solar power, 60 GW of wind power, 10 GW of biomass and 5 GW of small hydropower.

On the demand side, the energy requirement registered a growth of 4.3% in 2015-2016 against the projected growth of 8.7%, and peak demand registered a growth of 3.5% against the projected growth of 5.9%.  However, overall the shortage conditions prevailed in the country both in terms of energy and peaking availability.  India anticipates an energy surplus of 1.1% and peak surplus of 2.6% for 2016-2017.


Energy (MU)

Peak (MW)













          Source:  Central Electricity Authority

Challenges and Barriers to Renewable Energy Exports
While many positive developments suggest growing U.S. export competitiveness in India, exporters continue to face important bureaucratic and structural challenges, which lead to longer lead times and complexities for project development.  First, exporters must engage with a slow, often bureaucratic regulatory system that includes highly regulated electricity prices and inefficient state-owned distribution companies. Developers of all power generation technologies face the same hurdles, which can slow development and make investment decisions less attractive.

Second, U.S. exporters, particularly those in the solar sector, continue to face sector-specific issues, including a local content regimes (LCRs) that are the most stringent of any employed globally. Phase 1 of the Jawaharlal Nehru National Solar Mission (JNNSM), India’s flagship solar incentive program, banned the importation of crystalline-silicon solar cells (the ban was later extended to include modules). Phase 2 of the JNNSM, which is ongoing, reserved half of the 750 MW auction system for developers who use only Indian-made content.

In addition to LCRs, the wider regulatory environment and infrastructure for the renewable energy is problematic. India’s underdeveloped transmission and distribution (T&D) system remains an impediment to projects. Losses stemming from the inefficiency of T&D are estimated at nearly 17% of total electrical output. Another barrier towards the Indian government’s renewable energy strategy is the availability of land, a problem epitomized by the struggle to get the parliament to sign off on the Land Acquisition Bill. 

Leading Sub-Sectors

Of the 50GW of installed capacity from renewable sources in India, nearly 58% is wind power, with strong potential for additional growth.  According to MNRE estimates, the onshore wind potential alone is about 302 GW. However this sector faces challenges including squatters blocking good wind potential sites, inordinate delays in signing of power purchase agreements, timely payments, and distribution utilities shying away from buying electricity generated from wind energy projects. Wind tariffs have been progressively declining, reaching a record low to $ 0.05 (Rs. 3.46) per kilowatt hour (kWh) in February 2017.

Even though India’s wind supply chain remains extensive, it is dominated by the local manufacturers.  In fact, India enjoys 10 GW of wind turbine manufacturing capacity – three times its domestic demand, making it a key exporter to the international turbine market.  American exporters unfortunately can expect to be at a severe disadvantage. According to industry estimates, less than one percent of the Indian wind import market will be captured by U.S. exports. U.S. companies may find some opportunities exporting component parts, as India does not charge an import duty for wind turbine components and exporters like AMSC, for example, have successfully licensed wind turbine technology for years.

Among all the sub-sectors of the renewable energy, the goal for solar is the most ambitious and currently being prioritized for maximum growth across India.  Massive solar parks are under development, along with power auctions, in many states. In February 2017, the solar power tariff dipped to $ 0.04 (Rs. 2.97) kWh during the Rewa Solar Park auction – a record low.  Leading solar states in India include: Tamil Nadu, Rajasthan, Gujarat, Andhra Pradesh, Telangana, Madhya Pradesh, Punjab, Karnataka, Maharashtra, and Uttar Pradesh.

Solar is also the sector where U.S. exporters face the most persistent policy challenges – namely, Local content requirements that ban the import of technology. Unlike other markets where exports occur without a substantial amount of government support, promoting renewable energy exports to India requires a concerted effort on behalf of all U.S. Government trade and development agencies.  Leverage will often need to be applied in areas beyond the traditional trade policy space, since efforts only in that area are unlikely to be effective.

While LCRs limited the opportunity for Indian buyers and project developers to source technology from international markets, some solar technologies were imported. Despite these barriers, U.S. exporters captured a surprisingly high market share of nearly 12 percent of India’s import market.  However, the project development landscape is significantly changing, as more developers import solar panels from China due to their declining costs.  As a result, some of the earlier module suppliers have become project developers.  Other U.S. exporters may find opportunities to supply components to OEMs, such as energy storage products, inverters, wafers or polysilicon, as the market maintains almost no production capability in these technologies.

Transmission, Distribution and Smart Grids:
In India, the transmission and distribution of power is dominated by the government with the overall private sector role limited to 1 percent in transmission and 5 percent in distribution (Delhi and Odisha states; City of Mumbai, and parts of Kolkata, Ahmedabad and Surat municipalities have private companies engaged in electricity distribution). One of the largest challenges that the Indian power sector faces is transmission and distribution (T&D) losses, which are very high – 26.35 percent at distribution level and more than 8 percent at transmission level nationally. Several large states report more than 40 percent distribution losses. The Power Grid Corporation of India (PGCIL), which is the owner, operator, and developer of the national interstate power-grid says it will spend $18 billion in the next five years extending and upgrading the Indian power grid to include smart technology.

One area of potential market opportunities lies in “smart grid” technologies.  India is heavily focused on large scale grid modernization, to increase reliability and reduce black-outs, especially as additional renewable energy resources come online.  Several U.S. companies are participating in pilot projects, and currently negotiating larger utility-scale projects using technology proven in India.

Energy Storage:
India is home to more than 1.3 billion people – almost 18 percent of the global population – and has one of the fastest growing economies in the world.  India’s per capita annual electricity consumption of energy is one of the lowest in the world, with more than 300 million people currently lacking access to electricity, and an additional 250 million people whose intermittent electricity access may be limited to three or four hours per day.  Despite considerable growth in the power sector, many parts of the country continue to face severe power shortage as consumption increases faster than distribution, leading to shortages and poor quality of power supply. As a result, most industries maintain diesel-powered generators and households utilize inverters with lead-acid batteries as backup systems to ensure reliability.

India is also working on a fast track program to introduce Electric Vehicles to tackle its ever growing pollution issues.  This is another area where energy storage can play a big role.  Work has begun on policies and incentives to promote the energy storage sector in India.  For example, the Ministry of New and Renewable Energy (MNRE), through the Jawaharlal Nehru National Solar Mission (JNNSM) offers a higher capital subsidy for photovoltaic systems with energy storage, than those without storage.  U.S. energy storage technology currently enjoys a global competitive advantage, but suppliers will need to enter the market soon to establish relationships in this quickly developing market.

The Government of India has pledged to ensure continuous, 24 hours a day/seven days a week (24/7) power for all citizens within the next 5 years.  However, to achieve this objective and meet new demand growth, significant investment will be needed to increase grid efficiency as new generation assets – especially intermittent ones – come online.  For example, by the year 2022, Prime Minister Modi expects to increase India’s installed capacity to 100 GW for solar power and 60 GW for wind power.  With the increase of energy from renewable sources coming online, India’s grid challenges will require a variety of solutions to incorporate a range of energy sources, intermittent capacity levels, and storage options.  The Ministry of New and Renewable Energy is developing a National Energy Storage Policy to fast–track adoption of new technologies in India, and has announced demonstrations and pilot projects for renewable energy integration solutions for micro-grids, utilities, and large-scale distribution networks. 

U.S. companies interested in developing new business contacts in India’s rapidly expanding renewable energy sector should contact:

Ms. Renie Subin
Commercial Specialist
Tel: 91-11-23472155

Web Resources
Useful Links include:
Ministry of Power  
Ministry of New and Renewable Energy
Solar Energy Corporation of India  
Central Electricity Authority  
Indian Renewable Energy Development Agency  
India Smart Grid Forum
Confederation of Indian Industry
Federation of Indian Chambers of Commerce and Industry
National Electric Mobility Mission Plan 2020  
Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) 
India Energy Storage Alliance 


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